Independent and dependent contracting: Meaning and implications

In the context of the changing nature of work and the continuing growth of contingent employment contracts, this article examines the consequences associated with various forms of individually-negotiated, fixed-term contracts. This article first draws a distinction between what can be labeled as independent contracting arrangements, where the workers are autonomous and mobile, and other situations where contractors are more “dependent” on their clients. This investigation then provides an overview of the consequences associated with the employment of “independent” and “dependent” contractors. Based on a review of the existing research literature, the article examines the prescribed and realized benefits of individual contracting from the perspectives of the organization, the permanent employees, and the contractors themselves. Finally, the article concludes with some suggestions for human resource management (HRM) practice as well as areas in need of future research attention.